In October 2014,Jonathon Remodeling Co

question 47

Multiple Choice

In October 2014,Jonathon Remodeling Co.,an accrual-method taxpayer,remodels and renovates an office building for Dale and bills him $30,000.Dale signs a note for the debt.Dale keeps delaying payment and files bankruptcy in 2015.Creditors are informed that no assets are available for payment. Jonathon Remodeling Co.will report

• A)$0 income in both years.
• B)$30,000 income in 2014 and a bad debt deduction of $30,000 in 2015.
• C)$30,000 income in 2014 and a STCL of $30,000 in 2015 limited to $3,000 after netting.
• D)$30,000 income in 2014 and then must amend last year's return to show $0 income when advised of the bankruptcy.